PRETORIA – The South African Local Government Association (SALGA) has sounded the alarm over Eskom’s proposed Distribution Agency Agreement (DAA), warning that the power utility’s plans could amount to an unconstitutional seizure of municipal electricity distribution responsibilities.
In a strongly worded statement, SALGA expressed “deep concern” that the agreement threatens to undermine the constitutional mandate of local government while masquerading as a solution to the country’s electricity crisis.
The DAA wants the appointment of Eskom as an agent of a relevant municipality to run its electricity function, including maintenance, repairs and the collection of revenue.
In other words, consumers will no longer pay the municipality for electricity, but the money will instead be paid directly to Eskom.
The association argues that electricity reticulation is explicitly assigned to municipalities under Schedules 4B and 5B of South Africa’s Constitution, making any deviation from this responsibility subject to strict legal requirements under the Municipal Systems Act.
“Bypassing these processes would erode municipal autonomy and compromise democratic accountability,” SALGA stated, emphasizing that proper community consultation, council resolutions, feasibility assessments, and alignment with Integrated Development Plans are non-negotiable requirements.
Bypassing these processes would erode municipal autonomy and compromise democratic accountability.
SALGA outlined three critical risks posed by the proposed agreement. They warned that communities could lose their right to hold elected municipal leaders accountable for electricity delivery, fundamentally altering the democratic relationship between local government and citizens. Additionally, municipalities risk being stripped of core developmental functions, which could severely undermine their financial sustainability and ability to serve their communities effectively.
The third major concern centers on economic stability, as municipalities may find themselves unable to plan and leverage electricity distribution as part of integrated development strategies. This could have far-reaching consequences for local economic growth and community development initiatives.
The warning comes against the backdrop of a complex municipal debt crisis. SALGA President Councillor Bheke Stofile drew attention to what he described as an imbalanced public narrative around municipal finances.
“The R416 billion owed to municipalities by households, businesses, state-owned enterprises, and government departments is often overlooked, while the R210 billion owed by municipalities to Eskom and water boards is amplified at every turn,” Stofile cautioned, referencing March 2025 National Treasury figures.
He argued that this “imbalance distorts public perception and undermines trust,” insisting that “both sides of the ledger matter.” Stofile emphasised that if municipalities are to deliver services sustainably, every sector must honor its obligations.
The R416 billion owed to municipalities by households, businesses, state-owned enterprises, and government departments is often overlooked.
Rather than unilateral action, SALGA is demanding that Eskom and national departments engage in transparent consultation with municipalities, SALGA, and affected communities. The organisation insists that any support measures must align with constitutional and legislative frameworks while avoiding actions that erode local government’s role.
The association called for a focus on capacity building, financial restructuring, and sustainable debt management rather than power redistribution. SALGA said that support to municipalities must not come through unilateral impositions but through collaborative engagement that respects constitutional boundaries.
“Empowerment, not takeover, is the only viable path to restoring financial stability and protecting the dignity of our communities,” Stofile emphasized. “Rescue tools must not become backdoor takeovers.”
The association stressed that strengthening municipalities rather than circumventing them remains the only sustainable path to reliable electricity supply and restored public trust. Stofile concluded that “strengthening municipalities is the only path to reliable electricity and restored public trust.”
Since its establishment, SALGA has maintained its mandate to represent, promote, and protect the interests of organized local government. The organization vowed to continue ensuring that local government voices are heard and respected in all intergovernmental discussions while supporting municipalities in fulfilling their developmental role.
The proposed DAA represents a critical test of South Africa’s constitutional framework and the balance of power between different spheres of government as the country grapples with ongoing electricity supply challenges.
